Postal services redefining themselves

There was a time when your local post office would mainly sell stamps and deliver letters. No longer.

To counteract the turmoil brought on by e-mails and text messages, postal services worldwide have reinvented themselves, taking on the technological revolution that once looked to cripple them.

Traditional snail mail service has dropped sharply in recent years, though emerging countries are a notable exception.

According to the Universal Postal Union (UPU), global letter- and light parcel delivery dropped by 3.7 percent in 2011 from a year earlier, and by 5.1 percent when just counting Europe and the former Soviet Union.

And the death of letter-writing has forced postal services to either catch on new trends or disappear.

Earlier this month, Britain announced plans to privatize more than half of Royal Mail in a bid to transform it into a modern communication business.

“This is logical, it is a commercial decision designed to put Royal Mail’s future onto a long-term sustainable basis,” British Secretary of State for Business Vince Cable said.

“It is consistent with developments elsewhere in Europe where privatized operators in Austria, Germany and Belgium produce profit margins far higher than the Royal Mail, but have continued to provide high quality and expanding services,” he said.

Amid the dwindling delivery numbers for letters and large packages, there is hope: parcels weighing less than 2kg.

They “have seen an incredible growth thanks to Internet shopping,” Wendy Eitan of UPU said.

The key, she said, is for postal services to take advantage of their reputed reliability and the trust they instill.

“In the eyes of the public, the postal service remains the trusted third party to certify electronic correspondence or to arrange the return of goods” linked to e-commerce, she said.

Online shopping, and the millions of parcels it generates, has become a boon for a new type of postal industry.

One of those players is Germany’s Deutsche Post, which is investing 750 million euros (US$990 million) in expanding its package delivery network by adding 20,000 new reception points.

Similarly, PostNord — Sweden and Denmark’s merged postal services — is seeing a turnaround in its business thanks to its focus on online parcel delivery.

The same story can be told in Spain, where traditional mail delivery has plunged some 30 percent in the past five years, and the national Correos has its mind set on “developing parcel activities with specific solutions and the value added by electronic commerce.”

By 2020, Correos is determined to work along a business model “in which revenues do not exclusively come from the traditional postal business,” a spokesman told reporters.

France’s La Poste has taken it a step further. Aside from identifying parcels as “its primary sector of development,” it has also launched more than a dozen pilot projects exploring the possibilities of delivering medication to the elderly and to offer meter-readings for gas and electricity usage.

Bank operations and mobile telephony are other venues being explored. Italy’s Poste Italiane today runs about 6 million deposit accounts and has sold about 3 million SIM cards for mobile telephones.

In Argentina, the Correo Oficial now offers the sale of mobile phone top-ups as well as tax payment services, describing itself as a modern organization that offers “complex operations.”